Breaking News: Hydro Currents

Judge Redden to step down from Columbia salmon case

Eighty-two-year-old U.S. District Judge James A. Redden — who has rejected Columbia Basin hydro system operations for failing to protect salmon for more than a decade — has announced he will ask that the long-running case be assigned to another judge. Although the judge gave no reason for his withdrawal, it was reported he has been reducing his workload.

The judge has left the “biological opinion” for the system in place through 2013, when federal agencies must come up with more specific projects to help salmon. NOAA Fisheries’ recommendations include studying salmon migration, monitoring water temperature and other effects of climate change, and creating a team of fisheries managers to resolve potential harm to wild salmon runs by hatchery fish. The administration also agreed to provide an additional $40.5 million to improve salmon habitat in the Columbia River estuary.

Redden has repeatedly rejected biological opinions intended to govern federal hydro system operations on the Columbia and Snake rivers, saying they failed to adequately protect endangered salmon. Each rejection has carried the threat that the judge might eventually order removal of four major U.S. Army Corps of Engineers projects on the Lower Snake River: 635-MW Ice Harbor, 810-MW Little Goose, 810-MW Lower Granite and 810-MW Lower Monumental.

Meanwhile, the Federal Caucus — comprising the Corps, Bureau of Reclamation, and NOAA Fisheries — filed a brief in November saying the federal government would collaborate with the region’s tribes and states to respond to Redden’s order to bolster habitat actions in the biological opinion.

“As our progress report shows, improvements to the dams have resulted in 95-99 percent per-dam survival rate for juvenile spring Chinook and steelhead,” Corps Director of Programs Dave Ponganis said. “The report also shows how our state and tribal partners are restoring streamside habitat, removing barriers to open up new tributary and estuary habitat, and putting water back in streams.”

Senators back tax credits for clean technology, energy storage

U.S. senators have introduced bills to provide tax credits for U.S. manufacture of clean energy technology and for investment in energy storage technologies including hydropower.

Sen. Debbie Stabenow, D-Mich., introduced the Make it in America Tax Credit Act, S.1764, Oct. 31 that would provide an additional $5 billion for the Advanced Manufacturers Tax Credit program. The bill was referred to the Senate Finance Committee.

The National Hydropower Association applauded the move, saying it would bolster clean energy manufacturing in the U.S. “As more and more developers look to construct all forms of hydropower throughout the country, ensuring manufacturing is done here will help us tap over 1 million new U.S. jobs in the hydropower industry,” said NHA Executive Director Linda Church Ciocci.

NHA also hailed introduction Nov. 10 of the Storage Technology for Renewable and Green Energy Act, S.1845, by Sens. Ron Wyden, D-Ore.; Susan Collins, R-Maine; and Jeff Bingaman, D-N.M. The bill would provide a 20% investment tax credit up to $40 million for energy storage systems that are connected to the electric grid and a 30% investment tax credit of up to $1 million for on-site storage projects.

FERC issues proposed rules hiking hydro land use fees

The Federal Energy Regulatory Commission issued a notice of proposed rulemaking in November 2011 that would revise its formula for calculating government land use fees, resulting in significant increases in land fees paid by FERC-licensed hydro projects.

The U.S. Court of Appeals for the District of Columbia Circuit overturned FERC’s 2009 update of its land use fees. The court ruled that FERC imposed updated — and significantly higher — land use fees without allowing notice and comments as required by the Administrative Procedures Act. The court said the commission also improperly delegated the establishment of reasonable fees to other agencies, the U.S. Forest Service and Bureau of Land Management.

In response, FERC issued a Notice of Inquiry in February 2011, calling for suggestions how to create an administratively practical formula that applies uniformly to all licensees, does not impose exorbitant costs on the commission and reflects reasonably accurate land values.

After comments from eight entities representing licensees, industry trade groups, and federal agencies, FERC issued the notice of proposed rulemaking Nov. 17 and called for comments by Jan. 6, 2012.

FERC again returned to a formula drafted by BLM for calculating the annual fees, based on a National Agricultural Statistics Service census of agriculture, which incorporates values of farm lands and buildings. However, FERC said it would utilize actual per-county land values, rather than grouping the counties in 12 BLM zones that tended to inflate the values.

Lawmakers present bills to remove Klamath projects

Seventeen West Coast Democrats have introduced bills in the House and Senate that would authorize the Interior Department to spend more than $1 billion to remove four privately owned hydroelectric projects and perform environmental restoration on the Klamath River in Oregon and California.

Utility PacifiCorp had been seeking a relicense for the 161-MW Klamath project when environmental and fishing groups and state and federal resources agencies launched a campaign to remove the project. A 2009 settlement agreement calls for removal of 90-MW J.C. Boyle, 20-MW Copco 1, 27-MW Copco 2 and 18-MW Iron Gate and transfer of the non-powered Keno Dam to Interior.

PacifiCorp was brought to the negotiating table when faced with mandatory fishway prescriptions by Interior and the Commerce Department that would render the project no longer economical to operate. The full project also includes the 3.2-MW East Side and 600-kW West Side developments, which PacifiCorp proposed to decommission voluntarily, and the 2.2-MW Fall Creek development, on a Klamath River tributary.

In September 2011, a draft environmental impact statement by Interior and the state of California recommended removal of the four developments at an estimated cost of more than $291 million to ratepayers and taxpayers. However, lead sponsors of dam removal legislation — Sen. Jeff Merkley, D-Ore., and Rep. Mike Thompson, D-Calif. — said Nov. 10 that the total cost of removing the dams and “embarking on the environmental restoration called for in this legislation” is estimated at $1.086 billion, including $536 million in federal funds.

Dam removal pushed as jobs legislation

Backers of the bills — S.1851 in the Senate and H.R.3398 in the House — represented the dam removal effort as economic development, labeling it the “Klamath Basin Economic Restoration Act.” Interior Department studies said this work would support about 1,400 jobs during the one-year dam removal process, 4,600 jobs over 15 years of implementing restoration programs and about 450 annual commercial fishing jobs.

Under terms of the Klamath Hydroelectric Settlement Agreement, Interior Secretary Ken Salazar is to make a final decision, expected in March 2012, based on review of the draft environmental impact statement data and public input. Framework agreements call for removing the dams by 2020 if Congress and Interior Department scientists approve.

Although the Klamath settlement agreement set a cap of $450 million for dam removal, the Interior studies said the “most probable estimate” to remove the four dams and carry out mitigation is $291.6 million, in 2020 dollars. The settlement agreement calls for no more than $200 million of dam removal costs to come from additional charges to PacifiCorp ratepayers, while up to $250 million would come from sale of bonds in California “or other means deemed appropriate financing mechanisms.”

FERC issues new compensation rules for grid frequency regulation

The Federal Energy Regulatory Commission has issued new rules intended to ensure just and reasonable rates for frequency regulation service provided to organized wholesale electricity markets by generators, including hydropower, and some emerging technologies. The commission issued the final rules (RM11-7) Oct. 20 after considering comment on proposed rules issued in February.

FERC found that current compensation practices for frequency regulation services in organized wholesale energy markets might not acknowledge the benefits of faster ramping resources, which might improve operational and economic efficiency and reduce costs to consumers. FERC has been examining such ancillary services, partly to ease barriers to integrating variable renewable energy sources into the grid.

Regulation service is an ancillary transmission service that protects the grid by correcting deviations in grid frequency and balance on transmission lines with neighboring systems. Typically it is provided by generators, such as fast-responding hydropower units, that are specially equipped for the purpose.

The rule requires organized wholesale power markets to include in their tariffs a two-part market-based compensation method for regulation service. First, the resources would receive a uniform capacity payment, to include opportunity costs, for standing ready to provide frequency regulation service. Second, the resources would receive a market-based performance payment for each megawatt, up or down, provided in response to a system operator’s dispatch signal. The payment also would reflect the accuracy of the resource’s performance.

Canadian hydro investment could create 1 million jobs

A study commissioned by the Canadian Hydropower Association indicates that hydropower investment could produce more than 1 million Canadian jobs over the next 20 years from construction activities alone.

The study, titled “Creation and Economic Development Opportunities in the Canadian Hydropower Market,” was conducted by business school HEC Montreal. It examines FTEs, or “full-time equivalents,” where each FTE represents one person employed for one year. According to the report, electricity generation projects already under construction would create 776,000 FTEs between 2011-2030 and 224,000 induced FTEs by increased spending by those directly or indirectly employed by the projects. For more on this report, see page 17.